Apple sues OpenAI over trade secrets it says went into OpenAI's first hardware device

Apple filed suit against OpenAI, io Products, and two former Apple employees on Friday in the U.S. District Court for the Northern District of California, claiming trade secret misappropriation and breach of contract. Hiring people away from Apple is legal, and half of Silicon Valley does it. Apple's claim is narrower and uglier: that OpenAI ran its hiring pipeline as a collection channel, and then put what came out of it into the hardware device it is expected to ship this year.

The two named individuals are Tang Tan, OpenAI's chief hardware officer, who spent 24 years at Apple and left as VP of product design for iPhone and Apple Watch, and Chang Liu, a senior systems electrical engineer who spent eight years at Apple before leaving for OpenAI this year.

What Apple says happened

The specifics in the complaint are unusually concrete for a trade secret filing, which is what makes it worth reading rather than skimming.

Apple alleges that Tan used Apple's internal project codenames while interviewing Apple employees for OpenAI jobs, which is a way of signaling to a candidate that it is safe to talk about the unreleased product behind the codename. It alleges he asked candidates to bring "actual parts" to interviews for show and tell: batteries, logic boards, system-in-package modules. It also alleges he circulated an Apple offboarding document, the internal "Need to Know" material that explains how Apple checks departing employees, so incoming OpenAI hires would know how to get through Apple's exit process without tripping it.

The Liu allegations are the ones with a mechanism attached. Apple says Liu did not return his work-issued MacBook after leaving, found a bug that let the laptop keep reaching Apple's internal network file storage, and used that access to download dozens of confidential documents, many of them marked as such. Apple quotes a message it says Liu sent to a former colleague still at Apple: "LOL, I found out I can access the [network storage], so funny."

If that quote survives discovery, it is the whole case in one line. Persistent credentials on an unreturned device is not a sophisticated exploit. It is an offboarding failure, and it is Apple's offboarding failure, which is an awkward thing for Apple to have to allege in public.

The complaint also reaches past the two employees and into the supply chain. Apple says OpenAI approached Apple's manufacturing partners carrying Apple's confidential information, and that in at least one case a partner demonstrated a proprietary metal finishing technique for OpenAI while believing OpenAI had Apple's blessing to see it. Metal finishing sounds trivial next to a chip design. It is not. Process knowledge of that kind is expensive to develop, hard to reverse engineer from a finished part, and exactly the sort of thing a company with no hardware history would need.

Apple's summary of its own position: "This is the tip of the iceberg. Apple lacks visibility into what's been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership."

What OpenAI says

OpenAI's director of strategic communications, Drew Pusateri, posted the company's response on X within hours of the filing:

Our statement in response to this suit: We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere.

That is a denial of intent, not a denial of the facts alleged. It does not address the laptop, the codenames, the offboarding document, or the metal finishing. Companies do not usually litigate through press statements on day one, so this is not evidence of anything. It is worth noting only because it is currently the entire public defense.

Jony Ive, who co-founded io Products with Tan and now runs OpenAI's device work, is not named as a defendant. io Products is. That distinction is deliberate, and Apple's lawyers made it for a reason.

Why now

The timing tracks the product. OpenAI acquired io in a $6.5 billion deal in May 2025 to build consumer hardware. Chris Lehane, OpenAI's chief global affairs officer, told Axios at Davos in January that the device would arrive in the first half of 2026. Analyst Ming-Chi Kuo has suggested it is a phone that leans on agents instead of apps. Whatever it turns out to be, it competes with the iPhone, which is the product Tan spent two decades building.

Apple says more than 400 of its former employees now work at OpenAI. It says it wrote to OpenAI in February raising these concerns and got no reply.

None of this is happening between strangers. ChatGPT is integrated into Apple's operating systems under a partnership announced in 2024. Bloomberg reported in May that OpenAI had been preparing its own legal action against Apple over that partnership, and the New York Times reported it had considered sending Apple a breach of contract notice. Apple filed first.

This is also not io's first trade secret fight. The hardware startup iyO sued OpenAI and io over branding in 2025, then amended the complaint in March 2026 to add trade secret misappropriation claims, naming Tan as a defendant there too. OpenAI disputed those allegations as well.

What to watch

Apple is asking the court to bar the defendants from using or disclosing its trade secrets, to force the return of its materials, to preserve evidence, and for damages. The injunction request is the interesting one. If a court grants anything close to it before OpenAI ships, the device schedule becomes a legal question rather than an engineering one.

Everything above is an allegation. Apple has not proven any of it, and a complaint is written to persuade. What Apple gets by filing, regardless of the outcome, is discovery: sworn testimony and document production from inside OpenAI's hardware group. Apple said so itself in the filing when it complained about lacking visibility into what happens behind OpenAI's closed doors. That is the point of the exercise.